Performance Trends of Meihou Holdings <7369>

3. Financial situation

As of the end of June 2024, the total assets increased by 3,466 million yen from the previous period to 7,612 million yen. The main reasons are that cash and deposits increased by 225 million yen, contract assets increased by 408 million yen, and other current assets (electronic record claims, etc.) increased by 307 million yen. Goodwill also increased by 1,967 million yen. Total liabilities increased to 5,592 million yen, up by 3,571 million yen. The main reasons are that interest-bearing liabilities (long and short-term borrowings) increased to 3,134 million yen, while accounts payable increased by 321 million yen and accrued expenses increased by 244 million yen. Total net assets decreased by 105 million yen to 2,020 million yen. The main reason is a decrease of 88 million yen in retained earnings. As a result, the equity ratio decreased by 24.7 points to 26.5%.

Regarding the acquisition of Imada Construction Holdings in November 2023, we borrowed 2,700 million yen through a syndicated loan, which increased interest-bearing liabilities and significantly reduced the equity ratio. However, considering our basic strategy of actively utilizing M&A and the diversification of fundraising sources through our first trade with a major bank, we do not consider it a major concern at our company.

(Authored by FISCO guest analyst Masanobu Mizuta)